NEW YORK MEDICAID PLANNING: GIVING AWAY ASSETS

NEW YORK MEDICAID PLANNING: GIVING AWAY ASSETS

Posted By
Davidov Law Group

You may wonder what Medicaid has to do with your life as a senior citizen.
You worked hard as you traversed a career path, and payroll taxes were
taken out of your salary for years. You are going to qualify for Medicare
coverage when you reach the age of 65. Medicaid is for people who have
no financial resources.

This is an assumption that can get some people into trouble because they
are under the impression that Medicare will indeed cover all of their
health care needs during their active retirement years and the twilight
years that follow. In truth, Medicare doesn’t cover everything in
full, so you should be prepared to pay some out-of-pocket expenses even
for the things that Medicare does cover.

The above having been stated, the reason why Medicaid is indeed relevant
to many senior citizens is because Medicare won’t pay for long-term
care. This is a very big deal because most people are not going to be
able to easily and comfortably pay for long-term care out of their retirement savings.

A stay in a nursing home can consume all of what you have and more. In
the state of New York the average annual expense for a stay in a nursing
home was in excess of $130,000 last year, and costs are trending upward.
Ten percent of people who receive nursing home care remain in the facilities
for at least five years. The average length of stay is over two years.

As it turns out the majority of people who are residing in nursing homes
are enrolled in the Medicaid program. Medicaid will assist with long-term
care costs, but you do have to stay within an upper asset limit.

Everything that you own does not count, and this is something that is important
to understand. In the state of New York your home up to $802,000 in equity
is not counted. If you are married, the healthy or community spouse may
live in the home if you are institutionalized, and there is no equity limit.

Personal effects are not counted by the program, and your wedding and engagement
rings would not be counted. The value of the vehicle that you use for
transportation would not be counted either.

As for the rest of your assets, you may wonder if you can simply give them
away. It is possible to do this as long as you plan ahead well in advance
of applying for Medicaid.

If you have not given anything away within five years of applying and you
meet the eligibility requirements you should have no problems. However,
if you have divested yourself of assets within five years of submitting
your application you would be subject to a penalty.

This penalty would delay your date of eligibility. It is important that
you speak with an elder law attorney before giving away any assets.

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